More info: To read the complete agenda packet, visit bouldercolorado.gov and go to C for City Council.

Lawyers who represent marijuana businesses in Boulder say new regulations the City Council will vote on Thursday night will make it easier for the city to shut down remaining dispensaries, even though Boulder already has one of the toughest regulatory schemes in the state.

Instead of tightening up regulations, they said the city should restore administrative hearings for marijuana businesses that violate rules and create a graduated system of fines and penalties instead of revoking the license of violators.

The Boulder City Council will hold a public hearing on Thursday night as part of the second reading of the ordinance. If the council does not make substantive changes and approves the ordinance, it will become law. If the council makes changes, the ordinance will come back for third reading and another vote.

Senior Assistant City Attorney Kathy Haddock said industry lawyers have simply mischaracterized both the proposed ordinance changes and the current state of enforcement.

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The ordinance does allow for a business license to be suspended instead of revoked. However, the violations the city has found often have been so egregious that revocation was warranted, she said. She cited cases in which businesses were growing plants and processing marijuana in the dispensary in violation of local and state law, keeping product in unlabeled paper bags -- and they did not fix the problem within two weeks of being warned.

"It wasn't a gotcha type thing where you had to be an attorney to read the language," Haddock said. "It was a clear violation."

But attorneys said the violations often are more minor, such as having slightly too much square footage or mislabeling a jar. They also object to the city using not just past criminal convictions to disqualify owners and business partners, but also arrests that didn't result in conviction and civil offenses.

"It's particularly striking that they want to consider whether or not anyone has ever been arrested, which just flies in the face of due process," said Eric Moutz, a Boulder attorney who represents a number of marijuana businesses.

Haddock said the city always has taken such issues into consideration. What the ordinance changes do is make that clear. If anything, Haddock said, it's reducing the potential for a "gotcha" by making the city's expectations obvious.

Boulder initially allowed businesses to appeal denials and revocations to a hearing officer, but last year, the city did away with that system and told business owners who objected to the city's administrative decisions to file an appeal in Boulder District Court.

Haddock said the administrative hearing process was time-consuming and expensive for the city. Restoring it would mean raising fees even higher than the city already plans to do.

The ordinance proposes increasing the license application fee to $3,790 from $3,115 and the renewal to $2,750 from $2,075.

City officials say businesses need to pay higher fees to cover the costs of inspections, background checks and other administration of the marijuana licensing program.

Moutz and fellow attorney Jeff Gard said, in separate interviews, that the city should consider a system similar to the Beverage Licensing Authority, which holds show-cause hearings at which evidence is presented when a violation is alleged. The penalty can range from a fine to suspension of a license to revocation -- but revocation is very rare.

Haddock said the liquor license regulations are dictated in large part by state law. The cost of administering that program means the city only recoups about 75 percent of its costs through licensing fees, but fees are capped by the state.

From an initial 125 marijuana business license applications, Boulder now has 27 dispensaries or medical marijuana centers, 34 cultivation facilities and six infused product manufacturers.

The proposed ordinance updating the current law would raise fees for all marijuana licenses and renewals, limit advertising, impose new regulations on manufacturers of infused products and bar landlords from renting to unlicensed growers, among other changes.

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